Clothing retailer PVH Corp rises in after-hours trading
Shares of retail giant PVH Corporation jumped 7% to $ 112.92 on Tuesday after-hours trading after the company crushed its earnings expectations for the second quarter of 2021 and raised its outlook for the rest of the exercise.
PVH reported revenue of $ 2.3 billion for the quarter, resulting in EPS of $ 2.72 per share. EPS reported by the company is $ 1.52 higher than the consensus estimate of $ 1.16 per share.
At the same time, the company raised its annual EPS forecast for the third quarter to $ 8.50 from $ 6.60 it forecast last quarter.
Earlier on Tuesday, shares of PVH traded lower, ending the day’s session down 1.96% to $ 104.63 per share.
Details of earnings
Ahead of the results release, some analysts wondered if PVH could continue its torrid growth despite growing concerns about the delta variant of COVID-19.
Nineteen analysts at MarketWatch, the stock is considered “overweight” even though they set their target price at just over $ 120 per share.
However, the company has shown it has adapted well to the pandemic by increasing its total second-quarter revenue by 46% and e-commerce sales by 35% year-over-year.
The company’s two flagship brands – Tommy Hilfiger and Calvin Klein – have seen tremendous year-over-year sales growth. Tommy Hilfiger generated 41% more revenue than in Q2 2020, while sales of Calvin Klein items increased 56%.
PVH has one of the largest clothing portfolios in the world. The company made more than $ 7.1 billion in revenue in 2020, of which more than 85% comes from its two flagship brands.
Since 2000, the company has shifted its revenue base from North America to Europe, Asia-Pacific and Latin America. Today, more than 60% of PVH’s revenues come from these regions, according to website.
More recently, the company decided to lose weight when it unloaded its portfolio of heritage brands in July 2021 for $ 223 million. Following this move, the company increased its revenue forecast by up to 24%. Its GAAP EPS estimates also rose to $ 6.60 per share.
Despite the short-term benefit of offloading the heritage brand portfolio, PVH predicts that this move will result in a 2% drop in annual revenues compared to 2020.
Meanwhile, the company also expects modest growth heading into the third quarter. PVH expects third quarter EPS to be between $ 3.00 and $ 3.05, in addition to an increase in revenue of between 11% and 13%.
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